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Viewing Lake Turkana Wind Power through Vision 2030 lens

NEWS
By MUGO KIBATI | Jul 12th 2015 | 4 min read
By MUGO KIBATI | July 12th 2015
NEWS
President Uhuru Kenyatta lays foundation stone during the ground breaking ceremony of the Lake Turkana Wind Power project at Sarima, Marsabit County, last week. [Photo:PSCU]

Construction of the Lake Turkana Wind Power project at Loiyangalani in Marsabit County, has kicked off with the inauguration by President Uhuru Kenyatta, last week. The project, expected to inject 310 megawatts of sustainable clean energy, is a private sector flagship project of Vision 2030 -- our long term development blueprint that aims to turn Kenya into a newly industrialising, middle-income country with a high quality of life to all Kenyans by 2030.

The private sector’s role in Vision 2030 flagship projects is as, if not more, important, as the government’s. This is because Vision 2030 is a lot more than just expanding our rail, roads and other infrastructure network – it is about transformation of society in its entirety by triggering economic growth. Already, the world is beginning to take keen note of strategic significance of Nairobi, and the country as a whole. That global giants such as Google and General Electric are setting up their African headquarters in Nairobi, is evidence to this. Retail chains such as Massmart and Carrefour are coming to town and massive real estate developments such as Garden City and the Two Rivers Project are coming up.

It is against this background that the role and significance of the Lake Turkana Wind Power project should be appreciated. For starters, it is laudable that this is a private sector led Public-Private Partnership. Upon completion, slated for mid-2017, the project will inject 310MW of low cost wind power to the national grid, equivalent to nearly 20 per cent of current installed electricity generating capacity.

Energy is critical in the country’s move towards industrialisation and a critical enabler of economic development. This is because it has direct impact on the cost of manufacturing and value addition, and ultimately the cost of living. Vision 2030 envisages the country’s generating 23,000 megawatts of electricity by the year 2030. The Lake Turkana Wind Power project helps make this goal a reality. The value of the Lake Turkana Wind Power project, at a whopping Sh70 billion makes it the largest single private investment in Kenya’s history to date.

This project, which is a major game changer in global sustainable renewable energy, portends opportunities and lessons for the country. It places Kenya at the centre and leadership position in as far as clean energy is concerned. In fact, it is a global example of how renewable energy can deliver sustainable, inexpensive energy to the national grid. It is no wonder that it has won recognition and several international accolades in the last few months – voted the African Renewable Energy Deal of the Year by Thomson Reuters and the Infrastructure Journal.

The country also has a lot to learn when it comes to the financing of such big ticket projects. Initially, many commercial banks and venerable development finance institutions such as the World Bank walked away from supporting the project because they deemed it too risky. The would-be financiers found the combination of the remoteness of the project location, perceived demand challenges and pertinent systemic issues (such as connection to the national grid) too daunting.

National grid

However, tenacious investors such as KP&P and Aldwych International as well as several development finance institutions including AfDB, Norfund, Finnfund, IFU, EIB, EKF, PROPARCO, DEG, FMO, PTA Bank, EADB, Triodos came through to support the project by taking up debt or equity, with the African Development Bank as the lead arranger and Standard Bank and Nedbank as co-arrangers.

Hopefully, this project demonstrates to commercial banks that they need to re-appraise their risk models if they are to avoid missing out on opportunities coming up in various mega projects.

The benefits and lessons are also on a local scale. The wind farm that sits on 40,000 acres, bears great significance to Marsabit County and will contribute towards growing it and putting it on the path of economic takeoff. Its huge generation and associated local transmission infrastructure, which comprises 365 wind turbines (each with a capacity of 850 kW), the four sub-stations the LTWP will build (at its own cost) in the Marsabit towns of Loiyangalani, Kargi, South Horr and Gatab, will be used to finally connect Marsabit County to the national grid. The project also includes upgrading of the existing road from Laisamis to the wind farm site, a distance of approximately 204km, as well as an access road network in and around the site for construction, operations and maintenance.

As part of this project, Kenya Electricity Transmission Company Ltd (Ketraco), with concessional funding from the Spanish Government and from the Government of Kenya, is constructing a double circuit 400kv, 428km transmission line to deliver electricity from the project along with power from other future plants to the national grid, connecting several other counties to the national grid.

All these achievements have been made possible by the dedication of a rich array of stakeholders who have worked over the last nine years. As construction gets underway, it should awaken our commitment to support the implementation of various Vision 2030 flagship projects. We all stand to benefit by enjoying from the high quality life that Vision 2030 envisions for all citizens.

—The writer is the Chairman of the Board at Lake Turkana Wind Power project and former Director General of the Vision 2030 Delivery Secretariat

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